The Fraud Examiner

The Most Likely Victim of Fraud Is …
 

By Mark Blangger 
Research Editor, ACFE


Margaret is a retired schoolteacher and widow with two children and four grandchildren. Richard, a practicing physician, is a faculty member at a university medical center. Adam is a fourth-grader who excels at math but has a strong dislike for cleaning his room. John, an attorney, has been practicing tax law for more than 20 years, and his friends are among the upper echelon.

Of these four people, who is the most likely victim of fraud? Considering the countless scams and schemes that fraudsters use their devious, yet often very intellectual, minds to concoct and perpetrate, the answer might — or might not — come as a surprise.

Let’s find out which of our four “contestants” turns out to be the unlucky “winner.”

Margaret

Margaret, now 86, enjoys volunteering her time and sometimes makes monetary contributions to local and national charities. She also enjoys playing various lotteries and has won as much as $100. She says it’s not the money that makes her want to play, it’s the excitement that comes from thinking that she just might beat the odds.

When she received a check for $4,000, the beating-the-odds excitement kicked in and a smile crossed her face. The check appeared legitimate and was accompanied by a notice saying that she was the second-place winner of a national lottery she’d entered by mail. The notice went on to explain that all she needed to do was to deposit the check in her bank account, pay the required taxes and contact the “claims agent” at the phone number provided. So call the claims agent she did. But the seemingly inexperienced fraudster didn’t expect the recipient of $4,000 to be so feisty and inquisitive when Margaret asked whether she could trust that this was “a legitimate lottery.” Margaret was equally surprised by the fraudster’s response, who told her that if she was suspicious, she should hang up — she did!

Margaret then called Bob, her accountant, who told her that she’d avoided a serious scam. She told Bob that in spite of this being a scam, she enjoyed the thrill of feeling like she’d beaten such great odds — but more important, very proud of herself for questioning the legitimacy of the lottery — something many senior citizens do not do.

Margaret is only one of millions of seniors who become targets of a variety of fraud schemes. Here are a few reasons why they might wind up in fraudsters’ crosshairs:

  • They own their homes and have money put away for retirement.
  • They have excellent credit.
  • They are less likely to report fraud because they don’t know how or are too ashamed to report it.
  • They often make poor witnesses if the crime is reported because of anxiety and level of cognition.

Richard

Richard received what appeared to be an email from the administrator of the university medical center’s IT department. The email said the department was upgrading the university’s security system, which they do on a routine basis. The email, addressed to the entire staff in his department, asked that they provide their login and other information so the IT department could complete the upgrade. Befitting most doctors’ MO, Richard cooperatively and kindly complied. Unfortunately for Richard — and the majority of his patients — the email was from a scammer, not the university’s IT department.

The department’s office staff did not respond to the email and warned others to also not respond. But for Richard, the warning came too late.

Most everyone has received similar emails, known as phishing, which target as many email accounts as possible with the goal of luring in hundreds — even thousands — of unsuspecting victims. But in Richard’s case, the perpetrator was somewhat more creative and crafty, using a twist on the phishing scam that has come to be known as spear phishing. While phishing emails most often come from an obscure source trying to hook the masses, spear phishing targets a specific population, such as a university’s staff.

Spear phishermen compose what appear to be legitimate emails from an entity or someone with whom the target conducts business or communicates on a regular basis — such as an employer, insurance agent or bank. These emails most often use the same color scheme, font, language and even the logo of the alleged sender, adding to the “authenticity” of the message.

Richard is not alone. Other intelligent, highly educated professionals have also unwittingly taken the bait and fallen victim to this or similar cybercrimes.



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